Dec 22, 2005
by William Ginn
“Investing in Nature” was published in 2005, i.e. more than ten years ago. It is useful to remember that, since some of the ideas in it are now more mainstream than they were back then and we need to appreciate it in its time. Books like “Nature’s Fortune” (2013) have since laid out the case that we can and should integrate profitable human activities with nature and well-made documentaries such as PBS’s “Earth: a New Wild” or BBC’s “Earth: Human Planet” have made popular, at least among those who consider such subjects, the of long-term sustainable human activity complimenting nature, not opposing it. On the other side, E.O. Wilson in his latest book, “Half Earth” rejected the idea calling it the “new conservation” and evidently considering that a pejorative term.
In “Investing in Nature,” William J. Ginn embraces the fact the humans will be involved in conservation. He recognizes that communities are arranged around economic systems and we cannot defeat human nature. The way to conserve nature, therefore, is the use the human systems. Commerce, with the proper incentives, is the best was to secure a sustainable environment. You can see why this sort of thinking might be considered apostasy by the hand-off or deep green environmental movements that usually considers humans generally and human commerce in particular to be the enemies of the environment. Let me reveal my own bias. I am firmly on the side of Mr. Ginn.
Mr. Ginn illustrates his point with his own experience. Years ago, he was a leader int the movement to reduce solid waste in the State of Maine by imposing deposit fees on bottles and cans. Maine enacted a deposit law and millions of bottles and cans were diverted from landfills. Very good. A few year Mr. Ginn was trying to grow plants and grasss on piece of land with very acidic (sour) soil. He knew that ash could be used to “sweeten: the soil but needed a supply and found a source at a local mill. Things grew better. The ash was a waste product and it cost the mill around $5 million to get rid of it each year. Ginn formed a company to take this “bioash” and instead of being a solid waste product to be dumped turned it into a product to be sold. His firm eventually had $8.5 million in revenues and recycled over a million yards of waste each year. This was twenty-five times the volume of waste removed by the bottle bill and a much more elegant, sustainable and profitable solution to an environmental challenge. Stuff you have too much of is both a problem AND an opportunity.
The book features other examples of working with human systems to conserve nature and improve sustainability. By working with businesses, landowners and investors, conservationists can leverage much greater resources than they could if they tried to use their own or the government’s money. Maybe more importantly, they bring others in as enthusiastic partners, using their intelligence and imaginations to think up innovative ways to improve sustainability rather than deploying those same talents to finding ways to avoid regulation. It is a win all around.
He quotes Will Rogers from the Trust for Public Land who said, “We need to realize that the work is not about conserving places. It is about conserving people and our fellow species in the web of life. It is about helping people find a different way of life.”
The book covers various methods of leveraging resources to conserve nature, things like debt for nature swaps, tax incentives and grants and various ways to make a working natural landscape profitable enough that it can stay in a sustainable natural state. An interesting one is the “grass bank” that provides places for ranchers to graze their cattle while parts of their land are being restored and/or allowing ranchers to use grass banks at below market rates on the condition that the money saved go into ongoing conservation efforts. Again, if you provide positive incentives, people figure out ways to make them work. If you threaten or harass, people figure out ways to get out from under the coercion. It works better when all are created.
I was interested in the chapter on “partnering with big timber” and Mr. Ginn’s explanation of how timber land ownership changed in recent decades. I bought my first tree farm in 2005, and so was/am part of this. Until the 1980s, pulp and paper companies owned vast tracts of timberland that they managed to supply fiber to their mills. But they began to figure out that they did not need to own the timber in order to get the timber. It was part of the general corporate divestment trend in the 1980s and they started to sell off timber land.
It also had favorable tax treatment for investors. Besides owning land outright, investors could buy into Timber Investment & Management Organizations (TIMOs) TIMOs own the forest land and manage it for fiber. The tax advantage is that the TIMO passes income directly to investors and they pay the taxes. If the pulp and paper firm owns the land directly, its profits are subject to corporate tax and then stockholders pay tax on their dividend, double taxation of the same money. The TIMO has an advange over actually owning land in that investors have somebody else manage the land. They do not need to put big money up front and can buy and sell shares as they would a mutual fund.
The TIMO and small landowner model has significant environmental benefits and risks. On the plus side, TIMOs and landowners are more likely to be innovative in their approach to the land. (In the South we have seen this applied to tree genetics. The big firms were interested in this, but the tended to have a kind of monopolistic slow pace. There are more players now and things are accelerating). On the other hand, there is increased danger of forest fragmentation, as small parcels are divided. On the third hand (yes three) conservation organizations can more easily approach landowners of ecologically important parcel and persuade them to be better stewards of the land and/or buy land themselves to manage. This latter is exactly what organizations like Nature Conservancy have done. They own timberland and manage it sustainably, but still carry out harvest and earn revenue that can support more conservation.
Anyway, I recommend this book. It is still current after more than ten years and you can get it for a penny (yes one cent) plus shipping from Amazon.